Edgewell Personal Care reports modest growth in FY2024

12-Nov-2024 - Last updated on 12-Nov-2024 at 15:37 GMT

"As we look to fiscal 2025, with strong momentum across our International businesses, a strengthened leadership team and increased focus on execution across the organization, we anticipate a return to low single-digit organic net sales growth, further margin and profit expansion, and ultimately an increase in value creation for our shareholders," said Rod Little, Edgewell's President and Chief Executive Officer. © Ca-ssis Getty Images

Edgewell Personal Care Company has reported steady financial growth for FY2024, with net sales reaching $2.25 billion—a slight increase over the prior year—while setting an optimistic outlook for FY2025, driven by a strengthened business model, international expansion, and new innovations in Sun Care and grooming products aimed at bolstering margins and shareholder value.

Rod Little, Edgewell's President and CEO, expressed confidence in the company’s resilience, noting in the company's press statement that "for the fiscal year, we achieved slight organic net sales growth, meaningfully expanded adjusted gross margins and delivered double-digit adjusted earnings per share growth at constant currency for the second consecutive fiscal year."

Key financial highlights

In the fourth quarter of 2024, Edgewell reported net sales of $517.6 million, a 3.1% decrease from the same quarter last year. Despite the quarter-over-quarter dip, full-year results showed a minor upward trend.

Organic net sales, excluding currency fluctuations, declined 2.8% in Q4 but increased by 0.2% across the year, supported by strong international growth, notably in the company’s Wet Shave category.

GAAP earnings per share (EPS) fell by 11% for FY2024, while adjusted EPS increased by 18%, with adjusted EPS reaching $3.05 for the full year. Little attributed this improvement to a robust business model: "The strength of our business model was reflected in our healthy earnings growth, substantial cash flow generation, and structural de-leveraging of the business."

FY2025 outlook and strategy

Looking ahead, Edgewell is projecting organic net sales growth between 1% and 3% for FY2025, with adjusted EPS anticipated to grow by approximately 7%—or 13% on a constant currency basis. The company has laid out a strategic plan focusing on operational efficiency, streamlining the supply chain, and strengthening leadership.

Anticipating tailwinds from international expansion and product innovation in its Sun Care and grooming lines, Little remarked, "As we look to fiscal 2025, with strong momentum across our International businesses, a strengthened leadership team and increased focus on execution across the organization, we anticipate a return to low single-digit organic net sales growth." The company expects significant returns in the year's second half, estimating that two-thirds of its adjusted net earnings will come during that period.

Segment analysis

In FY2024, Edgewell experienced a mixed performance across product categories, according to its company press statement:

Wet Shave: Sales decreased by 1.5% due to weaker demand in North American markets. However, international growth in this segment helped offset some losses.
Sun and Skin Care: This category saw a 3.8% decline in net sales, primarily attributed to lower-than-expected growth in the Sun Care segment due to adverse weather conditions in the U.S. during August and September.
Feminine Care: The category recorded an 8.9% drop in net sales, as declines in pads and liners outweighed gains in tampon sales.

Strategic capital allocation, efficiency initiatives & restructuring efforts

Edgewell has prioritized returning value to shareholders, disbursing approximately $90 million in dividends and share repurchases in FY2024. The company declared a $0.15 per share cash dividend for the fourth quarter, payable in early 2025, and anticipates approximately $90 million in share repurchases in FY2025.

In alignment with its efficiency goals, Edgewell initiated several restructuring projects, including consolidating operations in Mexico. The move is expected to streamline manufacturing processes and reduce operating costs. According to the company's projections, these restructuring activities are anticipated to incur pre-tax charges of approximately $29 million in FY2025.

As Edgewell embarks on a new fiscal year, it remains focused on organic growth, innovation, and strengthening its international footprint. With solid cash reserves and a strategic plan to enhance operating efficiency, the company aims to drive value and meet shareholder expectations through a carefully managed approach to growth and investment.